Carlton Company is an 80%- owned subsidiary ofMirage Company. On January 1, 2015, Carlton sold $100,000 of 10-year, 7% bonds for $101,000. Interest is paid annually on January 1. The market rate for this type of bond was 9% on January 2, 2017, whenMirage purchased 60% of the Carlton bonds for $53,600. Discounts may be amortized on a straight-line basis. 1. Prepare the eliminations and adjustments required for this bond purchase on the December 31, 2017, consolidated worksheet. 2. Prepare the eliminations and adjustments required on the December 31, 2018, consolidated worksheet.
Carlton Company is an 80%- owned subsidiary ofMirage Company. On January 1, 2015, Carlton sold $100,000 of 10-year, 7% bonds for $101,000. Interest is paid annually on January 1. The market rate for this type of bond was 9% on January 2, 2017, whenMirage purchased 60% of the Carlton bonds for $53,600. Discounts may be amortized on a straight-line basis. 1. Prepare the eliminations and adjustments required for this bond purchase on the December 31, 2017, consolidated worksheet. 2. Prepare the eliminations and adjustments required on the December 31, 2018, consolidated worksheet.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....
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Carlton Company is an 80%- owned subsidiary ofMirage Company. On January 1, 2015, Carlton sold $100,000 of 10-year, 7% bonds for $101,000. Interest is paid annually on January 1. The market rate for this type of bond was 9% on January 2, 2017, whenMirage purchased 60% of the Carlton bonds for $53,600. Discounts may be amortized on a straight-line basis.
1. Prepare the eliminations and adjustments required for this bond purchase on the December 31, 2017, consolidated worksheet.
2. Prepare the eliminations and adjustments required on the December 31, 2018, consolidated worksheet.
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